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Economic Principles of PoPCoin, a Democratic Time-based Cryptocurrency

11/03/2020
by   Haoqian Zhang, et al.
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While democracy is founded on the principle of equal opportunity to manage our lives and pursue our fortunes, the forms of money we have inherited from millenia of evolution has brought us to an unsustainable dead-end of exploding inequality. PoPCoin proposes to leverage the unique historical opportunities that digital cryptocurrencies present for a "clean-slate" redesign of money, in particular around long-term equitability and sustainability, rather than solely stability, as our primary goals. We develop and analyze a monetary policy for PoPCoin that embodies these equitability goals in two basic rules that maybe summarized as supporting equal opportunity in "space" and "time": the first by regularly distributing new money equally to all participants much like a basic income, the second by holding the aggregate value of these distributions to a constant and non-diminishing portion of total money supply through demurrage. Through preliminary economic analysis, we find that these rules in combination yield a unique form of money with numerous intriguing and promising properties, such as a quantifiable and provable upper bound on monetary inequality, a natural "early adopter's reward" that could incentivize rapid growth while tapering off as participation saturates, resistance to the risk of deflationary spirals, and migration incentives opposite those created by conventional basic incomes.

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